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Oracle Enterprise Applications:  Speeding Innovation in the Cloud

With a Heavy Dose of Machine Learning

Oracle OpenWorld is a huge event, covering a plethora of topics. Here at Mint Jutras we focus exclusively on enterprise applications that run businesses. At the very core of those is Enterprise Resource Planning (ERP), but these days it is often difficult to tell where ERP ends and other applications begin. And therefore we often stretch the boundaries of ERP and also write about Enterprise Performance Management (EPM), Human Capital Management (HCM) and also the “Customer Experience (CX).” While we leave coverage of hardware, infrastructure and data base technology to other analyst firms, enterprise applications provided plenty of food for thought at Oracle OpenWorld 2018.

According to Steve Miranda, Executive Vice President, Applications Product Development, the two key themes driving his development organization are movement to the cloud and speed of innovation. These two are closely related. Mint Jutras has long been a strong proponent of software as a service (SaaS) for many reasons, not the least of which is the ability to deliver more innovation – that is also easier to consume – faster. Mint Jutras would agree both of these themes are necessary and commendable. Both address the inertia holding many companies back from being fully active, successful participants in the rapidly changing, global, digital economy.

In the recent Mint Jutras report Digital Transformation: It’s Time to Develop a Sense of Urgency, we discussed digital transformation in the context of enterprise applications. Where are we on this journey? You might be surprised by the data we have collected that indicates enterprises might not be as well prepared for the global, digital economy as they think. What is Oracle doing to remedy that situation?

What Is Digital Transformation?

In our previous report, we began our discussion by posing the question: What is “digital transformation?” In so many ways, in the context of the software that runs your business, it is simply delivering on the original promise of ERP. Mint Jutras defines ERP as an integrated suite of modules that provides the operational and transactional system of record of your business. Even the earliest versions of ERP did indeed provide this system of record. But did they live up to the promise of an end-to-end, integrated solution that could streamline and automate all your business processes? Did they make your life easier? No. The technology necessary to deliver on that promise simply didn’t exist back then.

In the meantime, the pace of change and the pace of technology innovation continue to accelerate. Today that pace is staggering and fortunately, the technology needed to deliver on that promise finally exists, and a lot of it sits in Oracle’s vast portfolio of products. However, not all of Oracle’s customers are able to take full advantage of these technologies simply because they are still running older solutions. We would call them “legacy solutions,” or sometimes “heritage solutions” – legacy solutions you are proud of. Indeed Mr. Miranda is quick to point out, “So we don’t have legacy customers. They may be on older software. But our customers are still always modern and going forward.”

In response, we would argue: All the more reason to get them off that older software and onto something more modern and technology-enabled. They need the ability to transact business digitally in order to actively and fully participate in the global digital economy. This requires a level of connectivity that is simply not possible with older, legacy solutions. Many of these older solutions pre-date the Internet, and let’s face it… the Internet has forever changed our world. It has created the global digital economy and it has leveled the playing field for entry.

In the past, only the largest companies were able to establish a global presence and trade on a world-wide basis. Today any company, large or small, can establish a global presence, creating unprecedented opportunities. We see new markets, new economies, and even whole new middle classes emerging every day. But as you start to expand your global presence, be careful what you wish for. Without digitally transforming the solutions that run your business, windows of opportunity will close as quickly as they open.

The Role Cloud (and SaaS) Plays

The Internet has truly changed our lives both from a business, as well as a personal perspective. As noted earlier, the Internet has leveled the playing field, making it possible for any company, large or small, to create a global presence and be an active participant in the global, digital economy. The Internet enables the cloud as we know it today. The ability to access software any time, from anywhere is inherent in any solution that resides in the cloud, opening doors for improved and increased usage. And let’s face it – solutions only bring value if they are actually used.

So, web-enablement is the first step. You can simply take your software that is licensed and installed either on or off-premise and improve access. Web-enablement is conducive to supporting distributed users. But taking the next step and running software as a service (SaaS) brings additional value: No capital expenditure required; no need to build out a data center or maintain hardware. The elasticity of a solution, including the ability to expand the number of users without over-taxing the supporting hardware and software, is critical during growth spurts. When your plans involve expansion, bringing up remote sites rapidly and easily is an added benefit and requires less information technology (IT) staff on site. This is especially important when you venture into new, emerging economies where local IT talent may be scarce or nonexistent.

While cyber-security is an understandable concern to all today, if you are a small to midsize company, without a dedicated IT security expert on board, chances are you assume more risk than you would in a SaaS environment. Even if you are a large company with IT security experts on staff, there is no way you will be able to match the level of investment Oracle makes in terms of security from infrastructure and software and business practice. Plus Oracle can deliver the peace of mind of business continuity in the event of a disaster, either natural or man-made.

Based on many of the reasons noted above, the majority of companies today see cloud and SaaS in their future. While customers vote with their wallets, each year our Mint Jutras Enterprise Solution Study seeks more clarity on preferences for different deployment options, including preferences of those that might not have (yet) decided to make a move off legacy software.

We have been asking the following question for years now: If you were to consider a new solution today, which deployment options would you consider? Participants are allowed to select as many as they wish. A summary of answers since 2011 is shown in Figure 1. We skip every other year simply to fit the chart on the page. SaaS is currently the option most likely to be considered and the willingness to consider traditional on-premise solutions dropped off dramatically between 2011 and 2013 and has not recovered.

Figure 1: Deployment Options That Would Be Considered Today

Source: Mint Jutras Enterprise Solution Studies

*Option added in 2015

But don’t let these preferences tempt you into thinking SaaS solutions will be prevalent in the very near future. Why not? There are simply too many existing on-premise deployments out there today, including some of the brands in the Oracle product portfolio (JD Edwards, Peoplesoft, Siebel…) Our most recent 2018 Enterprise Solution Study found about 40% of business solutions today are deployed as SaaS (Figure 2).

Figure 2: Percentage of Business Software that is SaaS

Source: 2018 Mint Jutras Enterprise Solution Study

Our survey respondents estimate that percentage will grow steadily, but it will take many years before SaaS solutions dominate. Mint Jutras believes the momentum is building and the transition will happen somewhat faster than Figure 2 would indicate. But the average company running legacy solutions on premise obviously need a gentle push.

Oracle Makes Moving to SaaS Easier

And Oracle is providing that gentle push. Earlier this year it introduced a new program called SOAR, a prepackaged set of utilities and methodology to get customers to the cloud. For customers running solutions like JD Edwards, Peoplesoft, Siebel, and even the E-Business Suite, this means replacing solutions. While some software vendors offer the same solution on premise and as a SaaS solution, allowing customers to simply lift and shift existing deployments, this provides limited value. In doing so you sacrifice some of the benefits of a multi-tenant SaaS solution (see sidebar). With multi-tenant SaaS solutions, vendors maintain a single line of code. As a result, they can deliver more innovation, at a faster pace. – one of Oracle’s stated goals. With single-tenant solutions running in private clouds, vendors and their clients still face the complexity and disruption of traditional upgrades.

Lifting and shifting also means you are dragging along any limitations of prior implementations. Oftentimes customers delay moving off of old systems because of customizations and yet many of those customizations were required, not to provide market differentiation, but to address functional gaps or other limitations of older solutions, or simply because that was the way things were always done. Today’s solutions are far more configurable and extensible, eliminating much of the need for invasive code changes. If an existing or proposed customization doesn’t provide differentiation, Mint Jutras advises against doing it. And if it does provide a level of market differentiation, look for ways to accommodate it without mucking around in the code. Look for component-based architectures that allow you to extend, rather than modify solutions.

Mr. Miranda seems to agree with these recommendations. When asked about existing customer perceptions around customization he said,

“… the more complex you are and the older implementation you have, the more strongly I would advise you, ‘Do not inventory your customizations.’ If you want an interesting archeological expedition, knock yourself out. What happens is they find things that they don’t even know why they did it. They don’t know if it’s relevant anymore. We have customers who customized things 15 years ago. We’ve actually added it to E-Business Suite. But they haven’t had the time to unravel it. I’m not saying this in a critical way; it’s just a reality. What I strongly encourage the customers to do is look at the baseline product. And guess what? There may be things that are missing that we haven’t built. But you won’t need an inventory of your customization to figure that out. You will know what’s relevant.

Through the SOAR program customers can see the depth and breadth of the product, and determine, with a level of certainty, how long it is going to take to get there. How much is it going to cost them? And when they come out the other end, what they will see in terms of improvement in business practice. In Mr. Miranda’s words:

“So, based on our experience of existing customers, we developed a set of utilities with Oracle Consulting that can take what we think is a reasonable scope – a certain number of integrations, certain number of reports, certain number of extensions. We’ve done the work to automate the data migration. We know how much it’s going to cost in terms of each migration or each extension or each report. And so, we can quickly give you an estimate. Here is your size and shape. Here is your cost. Here is your time. And here’s what we believe, based on a typical customer, will be the amount of business process change/improvement.”

Speeding Innovation

So, cloud is the first step towards speeding innovation, but there’s more to it than that. You also need some foundational technologies, which we still find lacking in the majority of businesses today (Table 1).

Development platforms and microservices architectures, on which applications are built, are the perfect example. For the reader with a technical background, a microservice architecture is defined (by Wikipedia) as an architectural style that structures an application as a collection of loosely coupled services. For those nontechnical readers, think of it as constructing a solution from a set of Lego building blocks.

Table 1: Embedded (or foundational) digital technologies

Source: 2018 Mint Jutras Enterprise Solution Study

Think about how you build a structure from Legos. Each Lego block is made of the same kind of material and is attached (connected) to the other Lego blocks the same way. In many ways they are interchangeable. But by choosing different colors and sizes, and connecting them with a different design, you can make a structure that is very unique. And once constructed, if you want to change it, decoupling some of the blocks and replacing them doesn’t destroy the parts that are not affected. There is far less disruption introduced than if you had constructed it with a hammer and nails.

These platforms and technologies provide a level of agility, configurability and extensibility to today’s applications to help us respond to change. Oracle has invested heavily in both its Platform as a Service (PaaS) and its Infrastructure as a Service (IaaS), resulting in its Oracle Cloud Infrastructure (OCI). It is now turning its attention to other foundational technologies like machine learning and natural language processing (NLP). But it is approaching these differently than some of its major competitors. Instead of providing these technologies as tool sets, Oracle is embedding them into applications so that customers of all sizes (not just those with deep pockets and large development staffs) can take advantage of them “right out of the box.”

Throughout the entire suite of application products, the concept is to turn what used to be “input-receiving” apps into “recommendation” apps. Examples include suggesting the next-best offer or the next-best action in CRM. Or they might help prioritize employee recruiting in HCM or make audit suggestions and cash-management recommendations in ERP.

Digital assistants (bots) will be available pervasively throughout the ecosystem, not only from your phone and through SMS, but also through Slack, Siri, Alexa, or Google Home. The way people work is changing, so the applications must change too.

Mint Jutras believes this approach to embedding these technologies is smart. Notice Table 1 captures not only current adoption rates, but also plans for adoption. We also allowed survey respondents to indicate where they expected software vendors to simply provide these technologies with no additional purchase required (the next to the last column). Few are demanding this today, or even expecting them. And yet Oracle is working on delivering them, much like Apple delivered Siri. Apple customers didn’t demand the ability to converse with their mobile devices. Apple just delivered it. Other device manufacturers followed suit. Pretty soon virtual assistants became commonplace features. And people got hooked. It was only after the value was recognized that people willingly went out and bought stand-alone devices like the Amazon Echo Dot and Google Home.

Now is the time to bring them into the enterprise, much like they were insinuated into our personal lives. Pretty soon these types of technologies will be generally available throughout the Oracle Cloud, but you won’t be able to take advantage of them if you are still stuck on old legacy solutions.

Develop a Sense of Urgency

As we noted in our report on Digital Transformation, it is time to develop a sense of urgency – the same kind of urgency Oracle has demonstrated in urging customers to move to the cloud in order to speed innovation. The digital age is upon us. The pace of change and the pace of technology innovation has accelerated beyond anyone’s expectations and it doesn’t show any signs of slowing down. We live in disruptive times.

We asked our 2018 survey participants to assess the level of risk their industries faced in terms of the potential for disruption.

Figure 3: What risk do you face in your industry being disrupted?

Source: 2018 Mint Jutras Enterprise Solution Study

While all but 10% acknowledged some level of risk, the majority (84%) feel the risk is low to medium rather than high or imminent. Yet we feel compelled to ask the question: How do you think the taxi industry would have answered this question on the eve of the launch of Uber? Nobody saw that disruption coming and therefore few (if any) were adequately prepared.

Disruptive change is nothing new, but the speed with which it can impact business models and revenue flows has certainly changed. While it took a decade for the personal computer to disrupt the computer industry, and years for digital photography to disrupt the film industry, it took less time for Netflix to put Blockbuster stores out of business. And how long did it take Airbnb to impact the hospitality industry or Uber to disrupt the taxi industry? These kinds of disruptions can happen virtually overnight, creating new ways of transacting business that can have a cascading impact on both front and back office applications.

This type of disruption might come from a variety of sources. We asked survey participants to select the single most likely cause of potential disruption (Figure 4).

Figure 4: What is most likely to cause this disruption?

Source: Mint Jutras 2016 Enterprise Solution Study

While the threat from new, innovative products may have the lesser disruptive impact on business processes and business models, it does require companies to place more emphasis on innovation. Windows of opportunity can open and close very quickly. Of course an agile ERP solution isn’t all you need to accelerate new product introductions, but you also don’t want it to be the reason you can’t respond to new market demands or take advantage of new and unprecedented opportunities.

New ways of selling/pricing existing products might include subscriptions to services or outcomes that replace outright sale of products. Rather than selling a machine, you might invoice for uptime or hours of production. You might ship a physical product for free and charge for usage and/or consumables. Software companies that used to offer perpetual licenses might now also (or instead) offer subscriptions to software as a service (SaaS). These types of changes can have a major impact on how you invoice, recognize revenue and manage cash. And these changes must be reflected in your ERP solution.

The impact of entirely new business models is even harder to predict because of the inherent “newness.” You don’t want your ERP solution to be the reason you can’t capitalize on that brilliant new idea that can create a new revenue stream. Your ERP must adapt as your business evolves.

And yet many hesitate to replace or upgrade aging solutions that have no hope of ever connecting with or leveraging the emerging digital technologies required to survive in today’s digital economy. Perhaps they are looking for proof they will not be taking a step backwards in moving to a newly developed solution. Indeed, there are some industries that may (still) be better served by some of its older, deeply entrenched products – industries like food and beverage or project-based businesses. These industries are still on the horizon for the Oracle Cloud solutions.

But perhaps the best customer reference for a wide range of industries comes from Oracle itself. The diversity of Oracle’s business is a testament to the breadth of the solution in a world of changing business models.  Oracles runs:

  • an on-premises software business
  • a subscription software business
  • a reasonably large consulting services business
  • a reasonably large, assemble-to-order, hardware business
  • a procure-to-order business for Micros on smaller machines

We wrap up with a quote from Mr. Miranda.

“We spent a ton of time combining feature functions we needed, technical innovations that either we built or the industry built, so now we have what we think is an extremely compelling, deeply functional, and differentiated solutions in just about every area: EPM, ERP certainly, now with Supply Chain Manufacturing as well…. Core HR including global core HR, benefits, payroll; and then CX being sales, service, marketing, both B2B marketing … and B2C marketing…. It is just an incredibly feature-rich area on top of those baseline components.”

The entirety of Oracle’s business runs on the same software in the cloud that all of its customers are running. That spells confidence and commitment.

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Plex Systems Accelerates Push Into IoT With DATTUS Acquisition

Customers: Prepare for a Tsunami of Data

On July 31, 2018 Plex Systems, a cloud ERP and MES solution provider for manufacturing, announced it had completed the acquisition of DATTUS, Inc. a leader in Industrial Internet of Things (IIoT) connectivity technologies. This is an important step in executing on its product strategy, which includes connecting to more IIoT data for more actionable insights, along with enhancing manufacturing and business processes.

As a solution provider of enterprise resource planning (ERP), the Plex Manufacturing Cloud provides the operational and transactional system of record of your business. But looking beyond business transactions, Plex’s goal has always been to connect the shop floor to the top floor. But that is often easier said than done.

While sensors, machines and equipment on the shop floor have been collecting vast volumes of operational data for decades now, that data has not always been “connected” or accessible for decision making. Indeed the very fact that this data collection has been happening for decades contributes to the problem. Many of the machines and software put in place decades ago pre-date the Internet and therefore have no ability to connect to a network. Retrofitting equipment or replacing it is expensive and most of these machines were designed to last a lifetime. Expensive custom integration projects are beyond the expertise and budgets of all but the largest manufacturers. So what’s the alternative?

Providing an alternative is what DATTUS is all about. DATTUS solutions connect manufacturing equipment and sensors to the cloud. Think of it as the bridge between you and your machines. The platform is a hardware/software combination, which collects data from PLCs, VFDs, industry protocols like MTConnect, and popular enterprise applications including Salesforce, SAP and (of course) Plex.

In addition to this plug and play connectivity, DATTUS also brings IIoT data management and industrial analytics. The data management and analytics capabilities previously offered by Plex were sufficient for managing the volumes of data within ERP. But as customers are empowered to bring almost any data stream into the Industrial Internet of Things, they now need to be prepared for a tsunami of data.

Giving Manufacturers a “Leg Up”

The IIoT is just one of several inter-related digital technologies we continue to watch, and what we most often see is limited progress being made in terms of leveraging these technologies. Our 2018 Mint Jutras Enterprise Solution study explored plans and investments in selected digital technologies normally associated with Industry 4.0. We find very low rates of adoption (Table 1) and many have no plans to change that. In spite of all the hype around all these technologies we confirmed many are still sitting on the sidelines of the latest manufacturing revolution.

Table 1: Digital Technologies Plans and Investments in Manufacturing

Source: 2018 Mint Jutras Enterprise Solution Study

*Includes those that expect vendors to deliver at no additional cost

Running legacy solutions based on outdated technology forcibly sidelines some. And others are hamstrung by decades-old equipment on their shop floors. Plex Systems’ acquisition of DATTUS can’t help with the first unless those running legacy solutions are willing to trade up to a more modern, technology-enabled solution. But it can help in connecting those disconnected machines.

While all adoption rates are quite low, we do find IoT has the lowest percentage of manufacturers with no plans and no activity and close to the highest percentage of those that have already made some investment (second only to 3D printing). This tells us manufacturers have at least a grasp of its potential. Indeed manufacturers have been collecting vast volumes of data from sensors on the shop floor for decades. And yet that data has gone largely underutilized because manufacturers fail to connect the data back to the enterprise applications, and the business decisions. And this is where DATTUS can open new doors.

Instead of retrofitting equipment or developing custom connections, the DATTUS platform provides “out-of-the-box” direct connectivity for machines using cellular capabilities. It can capture data from non-networked, discrete industrial assets while remaining agnostic to data type, machine protocol, and infrastructure. It is a hardware-agnostic IIoT solution that can reliably collect and manage data and make it available for further analysis and open doors to several other of the technologies listed in Table 1.

The availability of more data increases the need for analytics in order to make sense of it. The data within an ERP solution lends itself to historical reporting and perhaps even ad hoc queries. Both are designed to answer questions you already have. But where do you turn when it is not intuitively obvious which questions you should be asking in order to optimize production or grow your business?

Therein lies one of the primary differences between reporting and analytics. While reporting answers a series of pre-defined questions, the discovery process and the iterative nature of analytics helps you ask the right questions. Reporting helps you identify a problem. The right kind of analytics helps you avoid it. Reporting seldom helps you recognize an opportunity. Analytics help you seize it.

But as volumes of data start to grow exponentially, you eventually reach a point where the human mind is no longer able to assimilate and cope with that volume. This is where machine learning can add a level of intelligence that is simply not possible without technology. Data sets have grown rapidly in recent years, thanks, at least in part, to information-sensing devices such as those to which the DATTUS solutions connect.

And the shop floor provides us with some of the most often cited use cases for artificial intelligence and machine learning. The ability to constantly scan data collected by machinery and equipment on the shop floor, searching for patterns that have previously led to failures, have saved manufacturers countless hours (and costs) associated with preventive maintenance. By predicting failures, you only need to bring production to a halt to perform maintenance when it is really needed.

Similarly, in environments regulated by strict adherence to specifications, by monitoring sensor data continuously, machine learning can alert operators before out-of-spec product is made. While shop floor supervisors are only able to scan, monitor and cope with a limited amount of data, machine learning knows no such limitations. Machine learning can recognize patterns and correlate data points that a human does not recognize as relevant. And as more data is gathered, it keeps on learning. That is what continuous improvement is all about.

DATTUS adds capabilities for analytics on data-in-motion, quickly providing insights in support of decision making on the shop floor. This includes:

  • Anomaly detection (quality control)
  • Custom event rules
  • Real-time production and efficiency reports
  • Performance forecasting
  • Predictive analytics
  • Machine learning

As part of Plex Systems, we also see the potential of applying these industrial analytics capabilities to the business side of the equation within ERP for supply chain planning, financial planning and budgeting, forecasting and more. The possibilities are endless.

Mint Jutras believes these digital technologies are destined to be absorbed into the enterprise in general, and manufacturing in particular, in much the same way as technologies like artificial intelligence (AI) and natural language processing (NLP) have insinuated themselves into our personal lives.

Think about it. As consumers, we didn’t loudly voice our desire for AI or NLP. But that didn’t stop Apple from delivering Siri on an iPhone. Pretty soon Microsoft delivered Cortana on Windows 10; Google delivered Google Now; Amazon delivered Alexa and now Bixby is on your (newer) Samsung Galaxy. We see these digital technologies being absorbed into the manufacturing landscape in much the same way, as long as solution providers like Plex and DATTUS continue to innovate and push them into the mainstream.

Conclusion

While the technologies in Table 1 are typically outside the scope of ERP, in order for them to be truly transformative, they must interoperate and/or integrate with the enterprise applications like ERP in the front and back office. When purchased separately it is often a daunting task to connect back to ERP and in turn, the business itself. But without this connection, factories don’t get any smarter and neither do the leaders making business decisions. And that’s the real goal of digital transformation in manufacturing: a smart factory and smarter business decisions. And therefore this acquisition makes perfect (and practical) sense.

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Infor: Building Innovation From the Inside Out

Realizing Potential through AI, Analytics, Network, Cloud, and Industry

Infor has a mission: to “build beautiful business applications with last mile functionality and insights for select industries, delivered as a cloud service.” Behind this mission is a solid strategy to deliver industry-specific functionality to a growing number of specialized micro-verticals, through “Cloudsuites” that leverage the power of Internet-based networks, analytics and artificial intelligence (AI). Over the past several years the privately held company has spent billions of dollars acquiring and developing technology to execute this mission, providing a steady stream of innovation along the way. In the last 12 months alone the company has delivered 176 new products.

And yet, Infor is still one of the largest enterprise application solution providers of which you may never have heard. Even some of its customers (those running acquired legacy solutions) are not aware of how innovative Infor is. This is, at least in part, because of its approach. In the enterprise application market it is not unusual for a vendor to pre-announce its latest, greatest, most innovative idea with a big splash. Then as it begins to execute on this idea it realizes just how much foundational work needs to be done to deliver on it. In the meantime it grows quiet (or announces its next big idea) and (often several years) later when (and if) the first deliverables are finally ready, it makes another big splash.

Infor has taken an entirely different approach, building innovation from the inside and working its way out. It too had a vision of tremendous new innovation driven by advanced technology, but it also had the foresight to clearly see that much of the work needed to deliver on this vision was foundational. And therefore, while others were “splashing,” so to speak, Infor was building that foundation behind the scenes, but with a clear vision of the possible. It is now time to emerge from under the covers as the potential is being realized.

A Smarter Approach

This approach is even smarter than it might appear to be on the surface. Having grown through acquisition, Infor has a very broad portfolio of enterprise applications, including multiple Enterprise Resource Planning (ERP) solutions, some more modern and strategic than others. But Infor’s portfolio also contains other applications that extend the capabilities of ERP, such as Customer Relationship Management (CRM), Enterprise Asset Management (EAM), Human Capital Management (HCM), Supply Chain Management (SCM) and more. The different strategic ERP solutions can benefit from these complementary applications, some more so than others. So how can Infor integrate all of these applications and also individually bring them to their full potential without a lot of duplication of effort? The answer lies in taking a two-pronged approach.

Infor has invested in building a strong foundation, which has evolved into the Infor OS (operating service). Infor OS provides a common set of shared services to augment its applications (Figure 1). Rather than reworking each individual user interface, for example, Infor developed a common user experience (UX), which further serves to unify the experience when working across different but complementary applications.

Figure 1: Infor OS Augments the Cloudsuite(s) with Common Shared Services

Source: Infor

But before these strategic enterprise applications could take full advantage of those shared services, they had to be transformed. The transformations took time and effort in parallel with the development of Infor OS. But these efforts proved to be invaluable. Once complete (and even to a certain extent during the process), rather than working on security, connecting to the Internet of Things (IoT), country-specific localizations, or a host of other elements of the infrastructure, the individual enterprise application development teams could focus on delivering features and functions specific to their target markets.

Infor OS: The Journey to Microservices Architecture

While the name (Infor OS) is fairly new, the development of this foundation has been evolving for almost 10 years. First introduced as the Intelligent Open Network (ION), it was based on the same premise as Infor’s prior Open SOA (Service Oriented Architecture) (circa 2006 to 2009). That premise: to provide an environment that enables new functionality to be developed once and shared by multiple products in the Infor portfolio. However, unlike Infor’s Open SOA, which had become very heavy and took years to develop, ION was kept lightweight and simple. Over the years the name has changed and it has evolved to support what is commonly referred to today as a microservices architecture.

Never heard of microservices? You’re not alone. For the reader with a technical background, a microservices architecture, is defined (by Wikipedia) as an architectural style that structures an application as a collection of loosely coupled services. Unfortunately the reference to “loosely coupled” often conjures up the old argument of an integrated suite versus “best of breed.” But this is not that.

For those nontechnical readers, think of it as constructing a solution from a set of Lego building blocks. Think about how you build a structure from Legos. Each Lego block is made of the same kind of material and is attached (connected) to the other Lego blocks the same way. In many ways they are interchangeable. But by choosing different colors and sizes, and connecting them with a different design, you can make a structure that is very unique. And once constructed, if you want to change it, decoupling some of the blocks and replacing them doesn’t destroy the parts that are not affected. There is far less disruption introduced than if you had constructed it with timber, a hammer and nails.

Infor needed to transform existing strategic solutions by refactoring the underlying code to introduce microservices. Again, for the nontechnical reader, think of it as restructuring the code without changing the behavior or the functionality. You might be wondering, why bother to change the code if you aren’t changing what it does? There may be any number of reasons, including enabling the solution to take advantage of those common shared services. But Mint Jutras feels the most valuable by-product of refactoring is to make it more “extensible.” In the context of ERP: to make it easier for Infor (and possibly its partners) to add specialized features and functions to a solid code base, with minimal disruption.

This is really the (not so) secret sauce behind Infor’s ability to deliver “last mile” functionality, not just for major industries like manufacturing, or even verticals like food and beverage, but also micro-verticals like dairy, beverage, bakers, confectionary, ingredients, prepared/chilled foods and meat/poultry/fish. While some features and functions might be the same across all manufacturing, food and beverage manufacturers and distributors also must deal with lot and sub-lot traceability and recall. Many within food and beverage must also deal with catch weights.

Catch Weight is a food industry term that means “approximate weight” because unprocessed food products (particularly meats) naturally vary in size. A retailer might order a case of 12 turkeys. The manufacturer (food processor) will estimate the price of the order by the approximate weight (e.g. 15 pounds per turkey), but will then invoice for the exact weight shipped. This can wreak havoc in an ERP solution not well-prepared to handle it.

But catch weight doesn’t affect all food industries in the same way in. It is also used in the cheese industry to manage shrinkage as the cheese ages. So handling catch weight varies for different types of food. By handling all the different types of catch weights in a single line of programming code, you add a level of complexity that adds little or no value to the customer beyond the single problem it is facing. A cheese processor doesn’t care if you can satisfy the needs of a butcher. Having different “Lego blocks” of code to insert depending on the needs of the specific micro-vertical preserves simplicity without sacrificing very specific functionality.

Beyond Features and Functions

But there is more to be gained than industry-specific features and functions from this foundational approach. Most companies today are forced to undergo a digital transformation. Two years ago our 2016 Mint Jutras Enterprise Solution study found that 88% of participants felt that digital technologies were necessary for survival and 80% agreed that digital technologies are truly transformative in the way they connect operations to systems such as ERP. And yet at the time almost half still relied at least partially on spreadsheets and/or manual processes for maintaining their operational and transactional systems of record (i.e. conducting business). Our latest 2018 study shows at least half of companies still rely at least in part on spreadsheets to satisfy needs of various departments. So obviously those transformations are still a long way from being completed.

One strategic acquisition by Infor could go a long way in supporting these digital transformations. In 2015 Infor acquired GT Nexus, a cloud-based global commerce platform. This acquisition represents a marked shift in acquisition strategy. In its formative years Infor aggressively acquired its competitors with more of an eye to growing market share than filling gaps in its portfolio. By comparison, the acquisition of GT Nexus is quite strategic.

As we noted a year ago in Infor Ushers In the Age of Networked Intelligence:

More and more of the communication, collaboration and business processes of any company are likely to extend beyond the four walls of the enterprise. Focused on the supply chain, GT Nexus largely applies to those industries that must manage the movement of materials, but also has an impact outside of traditional manufacturing and wholesale distribution. The procurement of supplies in industries like healthcare and hospitality has not changed in decades and are ripe for innovation.

Whether you deal with a physical product or services, the value chain has lengthened and become more complicated. Yet expectations of response time and delivery performance have risen dramatically. Hence the need for an added level of intelligence in dealing with this new digital, network economy.

In addition, it is worth noting that last year Infor also acquired Birst, Inc. a pioneer of cloud-native Business Intelligence (BI), analytics and data visualization tools. The addition of Birst’s analytical tools was also a step forward, but Mint Jutras sees it more like another investment in infrastructure and shared services rather than a true differentiator. While the executives that came along with the acquisition might argue Birst is better (the best?) in terms of capability and speed of data discovery and easy to use analytics, most of the existing Birst customers are running enterprise applications that are not part of the Infor portfolio and it is still sold as a stand-alone tool. So you don’t have to run an Infor application to benefit from them.

That said, the tools were made immediately available to Infor customers as a like-for-like trade-in. Since then Infor has been working to replace any existing data cubes and content (previously Cognos-based) and also build out additional applications, content and migration tools.

Enhanced Data Management

Birst allows Infor customers to draw from all sorts of data sources for analysis. But the better story is what Infor has done in terms of data management in general, and to understand that you need to look across several different components “inside” Infor, including artificial intelligence, which requires you to select algorithms, train models and deploy data science. Because we’re talking about advanced technology, this can get very technical very quickly.

A business decision-maker seldom knows the difference between linear regression, neural topic modeling, K-means clustering and a boosted decision tree. Nor should they have to. From a business decision-maker’s point of view, it is more important to understand the potential, and that is quite simple. It’s all about answering these questions:

  • What happened?
  • Why did it happen?
  • What should I do?

To Infor’s credit, this is exactly what it is offering, even though it often falls into the trap of offering TMI (too much (technical) information) to nontechnical business folks.

What happened?

This is all about collecting data. It might be structured data from enterprise applications (yours or your trading partners’), semi-structured data like XML or CSV (maybe you get orders or payments from customers in XML files or streams of IoT data) or entirely unstructured data from social media or other community-based data. You need a common place to put all this data and Infor’s answer to this is its Data Lake. A data lake is a storage repository that holds raw data (usually vast amounts of it) in its native format. Yet while the data is in its native format, Infor also provides a catalog that can be used to determine connections between the different data elements (e.g. an order is connected to a customer, a dollar amount is connected to a key performance indicator).

But you need to consume that data in order to determine what really happened. Figure 2 (provided by Infor) is a bit on the technical side. The key takeaways from it: You might use Birst for analysis of the data; you might use the data in universal searches within the Infor applications; or you can develop your own applications using Infor’s Mongoose development platform.

Figure 2: Infor Data Lake: How to consume data from the data lake

Source: Infor

Why did it happen?

For the “Why?” question, Infor leverages the different connections within the data and does a correlation analysis, looking for causal factors. Did sales go down because prices went up? Or did they go down because sales reps were on vacation or left the company? Was the weather to blame? Or a sluggish economy? For some of these questions you need massive amounts of data, not all of which resides in your enterprise applications.

Infor claims to have no shortage of insights to offer across customer relationship management (CRM), financials, human capital management (HCM), procurement and more. An example of the types of financial insights are shown in the sidebar to the left.

What should I do?

This is where the real data science comes to play. Since announcing the Coleman AI Platform Infor has been developing its first AI data science applications. These are generally predictive in nature, drawing on deep machine learning for forecasting, optimization and decision execution. Some examples include patient demand forecasting for hospitals, a predictive framework to predict asset failure, inventory optimization across a number of different industries, predicting estimated time of arrival for logistic providers and benchmarking performance across industry. Benchmarking of course requires access to large quantities of external data.

And don’t worry if you don’t have data scientists on staff. Infor has over 100 of them ready and waiting to help.

Conclusion and Recommendations

For a company of its size Infor has been exceptionally quiet over the past several years. In the software industry staying quiet often means there is little or no new innovation to share. In the case of Infor, this could not be farther from the truth.

Infor is led by a group of executives with both the vision and the expertise to understand the true potential of advanced digital technologies today. Oftentimes before you can ever hope to take full advantage of this advanced technology you must lay a strong foundation, and this might go largely unnoticed as it is being developed behind the scenes. But Infor’s executives were not afraid to dig in and lay that foundation.

Infor is now starting to reap the rewards of these efforts. It is time to share them with the world, not quietly, but loudly and proudly. Even many of its own customers remain unaware of all that Infor has developed. There are over 90,000 Infor customers and many are still running on old versions or older, non-strategic products. They seem to think none of this new technology is for them.

Mint Jutras would caution them (and other companies running non-Infor legacy applications) against this train of thought. If not for you, then who?

To those running these old solutions: Don’t expect massive (any?) innovation for your old products. They aren’t going to get you where you need to go in order to compete effectively in the global digital economy. For decades ripping and replacing ERP solutions was avoided at any and all cost. Those days are over. If you are running an old, outdated solution, it is unequivocally time to rip and replace. You’ll be happy you did.

To Infor: You’ve developed a lot of great stuff. Get on your bandwagon and shout!

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Introducing Aera’s Cognitive Technology

Enabling The Self-Driving Enterprise

Cognitive capabilities are highly valued in human beings. They make people smart, and smart is good. According to the Oxford Dictionary, cognition is “the mental action or process of acquiring knowledge and understanding through thought, experience, and the senses.” Yet as automation becomes more and more prevalent, we expect more and more functions and processes to be performed without human assistance. Can technology really imitate human cognition? Why not? After all, we live in a world where self-driving cars, although not yet ubiquitous, are a reality. And in a world where terabytes of data are being replaced with zettabytes, is it even possible for a human to process data at the speed and granularity necessary for timely, data-driven decisions?

Enterprise applications have been used to streamline and automate transactional processes for several decades now, particularly where simple and straight forward rules can be applied. When inventory falls below safety stock, order more. But how do you know when to change safety stock? How do you balance inventory across your distribution network or work off excess inventory? How accurate is your forecast? Is it possible to automate the cognitive functions that understand (recognize patterns and learn from the past), predict the future, and not only make recommendations, but also take action? Aera Technology not only thinks it is possible, it is delivering on that promise today to enable the Self-Driving Enterprise.

Aera is quite a unique kind of company. Headquartered in Mountain View, California, it serves some of the world’s largest enterprises from its global offices located in San Francisco, Portland, Bucharest, Cluj-Napoca, Paris, Munich, London, and Pune. Using proprietary data crawling, industry models, machine learning and artificial intelligence, Aera’s goal is to revolutionize how people relate to data and how organizations function. It offers what it calls a “cognitive operating system.”

The Self-Driving Enterprise

Aera starts with the premise that if built-in intelligence can drive a car, then it should be able to drive a company. Like a self-driving car, a self-driving enterprise must connect all the different data points both inside (engine, accelerator, steering wheel, brakes) and outside (roadways and road conditions, other vehicles, pedestrians). It must do all this in real-time, because speed and direction changes must occur immediately as any of those conditions change. And it must be always on and always thinking. No snoozing at the wheel allowed. It also must be able to operate autonomously. With no driver, a self-driving car has to take action without being told what to do.

A self-driving enterprise will still have humans at the helm. Aera is not setting out to eliminate the decision-makers, but it is trying to make them smarter and more effective, able to use all the data available, not just the usual subset contained in an enterprise resource planning (ERP) solution.

If this has you curious to learn more, click here to read the full report.

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